TSX Rises on Softer US Inflation Data

The S&P/TSX Composite Index rose 0.5% to trade near 35,500 on Tuesday following the release of US inflation data. US consumer prices declined in June for the first time in six years, while core inflation was little changed, easing pressure on the Federal Reserve to raise interest rates. Financials traded higher, with RBC, TD Bank, BMO, and CIBC each gaining nearly 1%. Meanwhile, the BoC is widely expected to keep its key policy rate unchanged at 2.25% on Wednesday. In contrast, oil prices rose on renewed concerns over crude shipments through the Strait of Hormuz amid the escalating US-Iran conflict, fueling worries about higher energy costs. Gold prices also advanced, supporting mining stocks. Agnico Eagle, Franco-Nevada, and WPM gained more than 2%, while Barrick added over 2.5%.

Futures tracking the S&P/TSX Composite Index moved higher on Tuesday following the release of US inflation data. US consumer prices declined in June for the first time in six years, while core inflation was little changed, easing pressure on the Federal Reserve to raise interest rates and supporting North American financial stocks and the broader index. Meanwhile, the BoC is widely expected to keep its key policy rate unchanged at 2.25% on Wednesday. In contrast, oil prices rose on renewed concerns over crude shipments through the Strait of Hormuz amid the escalating US-Iran conflict, fueling worries about higher energy costs. Gold prices also advanced, lending support to mining stocks. Separately, Canada's federal banking regulator warned major financial institutions about risks associated with Anthropic's Claude Mythos and other advanced AI models.

The S&P/TSX Composite Index edged 0.1% lower to close at 35,253 on Monday following military exchanges between the US and Iran. US and Iranian forces exchanged heavy missile and drone attacks over the weekend and into Monday, pushing oil prices higher on renewed concerns over crude shipments through the Strait of Hormuz. Bond yields rose as inflation concerns reinforced expectations that interest rates will remain higher for longer in North America. Financials posted losses, with RBC down 0.3%, Brookfield retreating 0.9%, and CIBC losing 0.6%. Meanwhile, gold prices fell on expectations of a hawkish Fed, weighing on mining stocks. Agnico Eagle lost 2.2%, Barrick shed 2.1%, WPM fell 2%, and Franco-Nevada sank 8.4%. In contrast, energy stocks gained on higher oil prices. Canadian Natural rose 3.1%, Suncor gained 3.5%, and Cenovus added 4.7%. Investors also await the BoC's policy decision on Wednesday, with the central bank widely expected to keep its key interest rate unchanged.